When Preparing the Financial Statements for 2021, Marc Martin, CFO

question 56

Multiple Choice

When preparing the financial statements for 2021, Marc Martin, CFO for Maverick Mania Inc., noticed that during the year the company sold equipment with an original cost of $ 50,000 for cash proceeds of $ 18,000. At the time of the sale, the equipment had a carrying amount of $ 20,000. Maverick Mania uses the direct method to prepare its cash flow statement. On the 2021 cash flow statement, the company should report

• A) cash proceeds from investing activities, $ 20,000.
• B) cash proceeds from operating activities, $ 18,000.
• C) cash proceeds from investing activities, $ 18,000.
• D) cash proceeds from operating activities, $ 20,000.

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